One Tesla shareholder has initiated legal action against CEO Elon Musk, accusing him of insider trading due to selling shares prior to a decline in production.
Michael Perry lodged the lawsuit concerning Musk’s sale of his shares in November and December of 2022. In that fourth quarter, Tesla delivered more than 405,000 vehicles, translating to a 40% growth year over year, notwithstanding a slump in November.
Perry contends that Musk would have seen a 45% depreciation in his share value if he had sold after the November production and delivery figures were made public. Share prices diminished from over $228 per share around Nov. 4 to just above $113 by January before beginning to rise again.
Perry filed his lawsuit in Delaware’s historic Court of Chancery. According to its website, it is described “as the nation’s preeminent forum for the determination of disputes involving the internal affairs” of various businesses nationwide.
“Its unique competence in and exposure to issues of business law are unmatched,” the website states.
This court also recently denied Musk’s $56 billion compensation package in a lawsuit from another Tesla shareholder. Since then, Musk has advocated for the company to cease incorporation in Delaware. He has already reincorporated his SpaceX company in Texas after it was initially incorporated in Delaware.
Truth Voices sought comments from Tesla.
Perry alleges that Musk’s sale of shares garnered him approximately $3 billion in insider profits amidst his acquisition of the social media platform Twitter. Musk subsequently sold more shares in April and August to cover the $44 billion cost.
